The cost side of the climate equation
Rising temperatures are no longer an abstraction for British boardrooms. Research from consultancy Capgemini, drawn from 2,100 executives across 13 countries, finds that 84% of UK organisations have already felt the impact of climate change on their revenues, a sharp rise on the year before. The findings arrive after Northern Europe recorded its hottest early summer period to date, a reminder that physical risk now sits squarely on the profit and loss account.
The report, part of Capgemini’s annual A World in Balance series, describes organisations contending with supply chain disruption, productivity losses, rising costs, insurance pressures and tighter financing constraints. For finance directors and chief executives alike, the climate has become an operating condition rather than a compliance exercise.
Revenue impact and the quantification gap
Three-quarters of executives globally say climate change is already affecting revenues, while 87% report climate-related disruption to their supply chains. Yet only 15% of organisations have fully quantified the financial impact of such disruptions. That gap between experience and measurement is itself a risk, because unquantified losses are difficult to manage, price or insure against.
The UK figures stand out even within the global sample. The proportion of British organisations reporting revenue effects rose sharply over the past year, suggesting the country’s businesses are feeling physical climate risk acutely. Sarah Dixon, sustainability lead for Northern Europe at Capgemini, says it is encouraging to see the topic move into the core of business decision-making.
Resilience becomes the organising idea
The research finds companies repositioning sustainability around resilience, concentrating on immediate climate and water risks while keeping longer-term targets in place. Dixon points to circular approaches to operations as an example, bringing parts of the supply chain closer to the business, reducing cost and strengthening resilience at the same time.
Sustainability begins to pay its way
Value creation has become a principal motivation for investment. Some 73% of executives cite it as a key driver of sustainability spending, and 69% of organisations now report that their sustainability initiatives deliver a net-positive return, up from 49% a year earlier. Numbers of that kind change boardroom conversations faster than any amount of persuasion.
When an initiative pays for itself, it competes for capital on equal terms with any other investment. That shift matters for mid-sized and large firms alike, particularly those facing margin pressure from energy costs and insurance premiums that increasingly reflect climate exposure.
The net zero delivery problem
Progress on decarbonisation is less convincing. Two-thirds of surveyed organisations acknowledge that aligning sustainability efforts with science-based targets is proving difficult, and 11% now say they are falling behind on their net zero goals, a marked deterioration on the previous year.
Ankit Todi, chief sustainability officer at Mahindra Group, describes a clear shift towards pragmatic short-term decision-making, with organisations concentrating on what can genuinely be delivered within three to five years rather than announcing distant targets. Dixon adds that longer-term work, particularly on Scope 3 emissions, has not gone away, even as attention narrows to nearer-term risks.
The dual role of artificial intelligence
Artificial intelligence complicates the picture. Some 45% of executives say the technology has significantly increased their organisation’s greenhouse gas emissions, a figure that reflects the energy appetite of data centres and high-compute workloads. Even so, 71% believe the benefits of generative AI outweigh its environmental costs, and among the minority of organisations that actually measure the impact, agreement is stronger still.
Practical applications and the measurement gap
The optimism has practical foundations. Executives report widespread deployment of the technology: 61% of organisations use it for supply chain and logistics optimisation, 52% for energy efficiency, 43% for waste reduction and recycling, and 31% for monitoring water use. One UK telecoms and media business used connected sensors and AI to track data centre cooling performance, saving around £1m a year in energy costs, while an international helicopter operator cut the time spent compiling environmental disclosures by three-quarters using agentic AI.
Measurement, however, lags behind deployment. Only 38% of organisations measure the energy consumed by their AI systems, 34% measure the associated carbon footprint and just 30% monitor the water used in their high-compute operations. Without such numbers, claims of net environmental benefit remain largely unproven. Dixon’s assessment is candid: there is, she suggests, considerable distance left to travel before sustainability performance matches sustainability ambition, and the businesses that close that gap first will be best placed to protect revenue in a warmer world.